Kakao Entertainmentwill terminate its North American webtoon platform service, Tapas. The investment in Tapas and Radish, made in 2021 with approximately $8.4 billion to establish a foothold in the North American webtoon and web novel market, is now being wound up after five years.
According to the content industry on the 22nd, Kakao Entertainment plans to send pre-notices to publishers and rights holders regarding the Tapas service termination later today. The notice is expected to include the service shutdown schedule, work operations, settlement procedures, and other follow-up steps.
Tapas is a platform acquired by Kakao Entertainment to target the North American webtoon market. In 2021, Kakao Entertainment confirmed its acquisition of Tapas and the web novel platform Radish. At the time, Tapas was valued at approximately $4.6 billion, and Radish at approximately $3.8 billion. The combined investment in the two companies totaled about $8.4 billion. Kakao Entertainment introduced Tapas as the first webtoon platform in North America, positioning it as a forward base for expanding its global content business.
However, the North American platform strategy was gradually scaled back. Last year, Kakao Entertainment terminated the Radish web novel platform service. At that time, Kakao Entertainment stated, “We will end Radish in North America and concentrate our efforts on Tapas to conduct efficient story operations.”
Tapas and Radish merged in 2022 and were reorganized under the Tapas Entertainment structure. At the time, Kakao Entertainment announced plans to grow its North American story IP business by combining Tapas, Radish, and UseeWorld. However, with Tapas now following Radish into service termination procedures, Kakao Entertainment’s strategy of directly operating North American platforms has effectively come to an end.
From an accounting perspective, the North American platform investment had already been reflected as a burden on Kakao Entertainment’s performance. In its fourth quarter 2023 results, Kakao recorded impairment losses related to Kakao Entertainment amounting to $675 million. Of this, Tapas accounted for $348 million in impairment. At the time, Kakao explained that the remaining goodwill balance for Tapas, which had suffered significant impairment, was only about $86 million.
Restructuring related to Tapas had begun earlier. In 2023, Kakao Entertainment initiated liquidation procedures for Tapas Korea, the Korean subsidiary of Tapas Entertainment. At the time, the company explained this as a measure to improve management efficiency. The current termination of the Tapas service is interpreted as not only an accounting write-off but also a business-level cleanup of the North American platform investment that had already been largely impaired.
This move aligns with Kakao’s broader business restructuring. Last month, Kakao held a board meeting and resolved to split its personnel into Kakao AI and Kakao X. The surviving entity, Kakao X, is set to launch as a future-value investment company under which content affiliates such as Kakao Entertainment, SM Entertainment, and Kakao Piccoma will operate.
Industry observers interpret this as Kakao Entertainment shifting away from directly operating low-profit overseas platforms and refocusing its content strategy on proven businesses such as IP distribution, video adaptation, and Japan’s Piccoma. Given that the platform intended to serve as a foothold in the North American market through an investment of over $8 billion is being shut down after just five years, Kakao Entertainment’s global content strategy appears to be shifting from direct platform operations toward IP utilization.
in TECH
